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DECREE No. 103/1999/ND-CP OF SEPTEMBER 10, 1999 ON ASSIGNING, SELLING, BUSINESS CONTRACTING OR LEASING STATE ENTERPRISES

THE GOVERNMENT

Pursuant to the September 30, 1992 Law on Organization of the Government;

Pursuant to the April 20, 1995 Law on State Enterprises;

At the proposal of the Minister of Planning and Investment,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- The objectives of the assignment, sale, business contracting or lease of an entire State enterprise

The assignment, sale, business contracting or lease of an entire State enterprise constitutes measures to further restructure and renovate small-sized State enterprises which have suffered from chronic losses or where the State ownership needs not to be maintained, with a view to:

1. Creating conditions for restructuring State enterprises and raising the economic efficiency and competitiveness of the State-run economic sector;

2. Creating jobs for laborers; changing the enterprise-managing modes, creating a driving force for the promotion of the laborers� right to mastery; using with higher efficiency the invested property and tapping all potentials in various economic sectors for investment in production and business development;

3. Reducing the State�s expenses and responsibilities for business management; ensuring the common interests of the State and the laborers.

Article 2.- Scope of application

1. This Decree prescribes the assignment, sale, business contracting and lease of an entire enterprise, applicable to the following State enterprises:

a) Independent State enterprises and member enterprises of corporations, which have possessed on their accounting books the State capital of less than 1 billion VN dong and have suffered from chronic losses or where the State needs not to hold shares, except for enterprises being State-run agricultural farms, forestry farms and State enterprises operating in the field of consultancy, designing and expertise;

b) Independent State enterprises and member enterprises of corporations other than those specified in Point a of this Article, which have possessed on their accounting books the State capital of from 1 to under 5 billion VN dong and have suffered from chronic losses, but not yet fallen into the state of bankruptcy, have been unable to overcome the situation though necessary measures were applied. For such enterprises, the Prime Minister shall decide on the case-by-case basis.

2. The business contracting within the State enterprise, the lease, sale or assignment of part of the State enterprise and the leasing, sale or assignment of single assets of the State enterprises shall not be subject to the regulation by this Decree.

Article 3.- Terms and expressions used in this Decree shall be construed as follows:

1. "Assignment of a State enterprise to a labor collective (referred to as the enterprise assignment for short)" means the transformation of the State-owned enterprise and the State-owned property thereat into the ones owned by the labor collective under certain conditions.

2. "The sale of a State enterprise (referred to as enterprise sale for short)" means the change of ownership with money collected for the entire property of the State enterprise into the ownership by a collective, individual or other legal person.

3. "Contracting a State enterprise for business (referred to as business contracting)" is a mode of State enterprise management whereby the party undertaking the business contract shall be empowered to manage the enterprise, obliged to fulfill a number of norms and meet the prescribed conditions and enjoy benefits under the contract.

4. "Leasing a State enterprise (referred to as enterprise lease for short)" is a form of transfer of the right to use the assets and labor in the enterprise to the lessee according to terms stated in the contract.

5. "The enterprise assignee, buyer, contractor or lessee" is the representative of the legal person, collective, a group of persons or individuals, that receives, buys, undertakes the business contract of or rents the enterprise.

6. "The enterprise assignor, seller, contracting party or lessor" is the representative of the agency or the enterprise, who effects the transfer, sale, business contracting or lease of the enterprise.

7. "Selling, business contracting or leasing enterprises by direct mode" means the form of negotiating, concluding and signing the contract directly between the enterprise seller, contracting party or lessor and the enterprise buyer, contractor or lessee in cases where there is only one person making the registration therefor.

8. "Selling, business contracting or leasing enterprises by mode of bidding" means the form of selecting the buyer, contractor or lessee through bidding in cases where there are two or more persons making the registration therefor.

9. "The minimum price" is the lowest price which the seller, lessor or contracting party can accept and offer when deciding the sale, business contracting or leasing of the enterprise.

10. "The enterprise leasing/selling prices" are the prices agreed upon by the lessor and the lessee or the seller and the buyer by direct mode or determined through mode of bidding.

11. "The enterprise value according to the accounting books" is the total asset value indicated in the enterprise�s balance sheet under the current accounting regime.

12. "The actual value of enterprise" is the total value of the enterprise�s actual assets at the market prices by the time of determining the enterprise value.

13. "The labor collective" means the entire existing labor of the enterprise or the collective of laborers who voluntarily implement the resolution of the congress of the enterprise�s workers and employees on the reception, purchase, business contracting or renting of the enterprise, which is represented by the Executive Committee of the enterprise�s Trade Union or the person elected by the congress of the enterprise�s workers and employees in undertaking the reception, purchase, business contracting or renting of the enterprise.

14. "The ministry" shall include ministries, ministerial-level agencies and agencies attached to the Government.

15. "The People�s Committees" means the People�s Committees of the provinces or centrally-run cities.

16. "Corporations 90, Corporations 91" are the State corporations established after the models mentioned in Decisions No. 90/TTg and No. 91/TTg of March 7, 1994 of the Prime Minister.

17. "The Renewal Boards at enterprises" are the Boards for Management Renewal at enterprises set up by decisions of ministries, provinces, cities or Corporations 91.

18. "The Boards for Renewal of Enterprise Management" mean the Boards for Renewal of Enterprise Management under the ministries, provinces, cities or Corporations 91.

Article 4.- Subjects entitled to the assignment, purchase, business contracting or renting of State enterprises

1. Subjects entitled to be assigned enterprises shall be the collective of laborers working at the enterprise, represented by the Trade Union Executive Committee or the person elected by the congress of the enterprise�s workers and employees.

2. Subjects entitled to purchase State enterprises:

a) Labor collective or individuals working in the enterprise;

b) Enterprises of all economic sectors, except for foreign-invested enterprises;

c) Vietnamese citizens with full civil act capacity, except for persons who are not allowed to set up and manage enterprises as stipulated in Clauses 2, 3, 4, 5, 6, 7 and 8, Article 9 of the Law on Enterprises.

3. Subjects entitled to business contract or rent State enterprises:

a) Labor collectives or individuals in the enterprise;

b) Enterprises of all economic sectors, except for foreign-invested enterprises;

c) Individuals having their business registered.

Article 5.- The principles for enterprise assignment, sale, business contracting or lease.

1. The enterprise assignment, sale, business contracting or lease aims to maintain production and business; the assignees and purchasers must not resell the enterprise during the period prescribed in the contract.

2. All the assets of the to be- assigned, sold, business contracted or leased enterprises shall be calculated in value. The enterprise�s value shall be calculated at the actual market prices.

3. Priority in the enterprise assignment, sale, business contracting or leasing:

a) The enterprise assignment shall only apply to collectives of laborers in the enterprises;

b) Priority in the enterprise sale, business contracting or lease shall be given to those who commit to employ the largest number of laborers in the enterprise to continue the business.

4. Openness in the enterprise assignment, sale, business contracting or lease:

a) The assignment, sale, business contracting and lease of enterprises must be made public at the enterprises and on the mass media to all subjects concerned 30 days before the implementation thereof;

b) Where there is only one person registering to buy, rent or contract the enterprise for business, the results of the direct agreement between the buyer and the seller, the lessee and the lessor or the contracting party and the contractor shall be publicly announced at the enterprise;

c) Where there are two or more persons registering to purchase, business contract or rent the enterprise, the bidding must be organized.

5. The enterprise business contracting or leasing term shall be agreed upon by the two parties, but shall not be under 5 years.

6. Signing the contract for enterprise assignment, sale, business contracting or lease:

The enterprise assignment, sale, business contracting or lease must be effected in the form of a written contract. The contract shall serve as basis for the parties involved to fulfill their commitments and ensure the legality for the clearance and solution of arising matters.

Article 6.- The use of proceeds from the enterprise sale or lease

1. The proceeds from the sale of enterprise, after subtracting the expenses in service of the enterprise sale, paying the secured and due debts, shall be used in accordance with the provisions in Decision No. 177/1999/QD-TTg of August 30, 1999 "on the organization and operation of the Funds for Support of Restructure and Equitization of State Enterprises".

2. The proceeds from the enterprise lease:

a) Where the lease term expires and the lessee buys the enterprise or the enterprise terminates its operation, the proceeds from the enterprise lease, after subtracting the expenses for the enterprise leasing activities, shall be used in accordance with the provisions in Clause 1 of this Article;

b) Where the enterprise is leased for a definite term and the enterprise continues its operations and registration as a State enterprise, the proceeds from the enterprise lease shall be accounted into the revenue of the leased enterprise.

Article 7.- Expenses for the organization of enterprise assignment, sale, business contracting or lease

The actual, reasonable and necessary expenses for the organization of the enterprise assignment, sale, business contracting or lease shall comply with the spending levels prescribed for the equitization of State enterprises and be accounted as follows:

1. In case of enterprise assignment: They shall be deducted from the value of the assigned enterprise;

2. In case of enterprise sale or lease: They shall be deducted from the proceeds from the sale or lease of the State enterprise.

In case of the business contracting, they shall be accounted into the expenses for the enterprise�s regular operations.

Article 8.- Interchange between forms of assignment, business contracting, lease and sale of State enterprises

Where there is a need to change from the form of enterprise business contracting or lease being implemented to other forms, the current contract must be liquidated and direct negotiations must be conducted in order to sign a new contract under the provisions of this Decree.

Article 9.- Protection by the State

1. The State shall protect the ownership right and lawful interests of the enterprise assignee, purchasers, business contractors or lessees under the provisions of law;

2. The State shall guarantee the interests of laborers in the to be-assigned, sold, business contracted or leased enterprises according to the provisions of the labor legislation.

Chapter II

ASSIGNMENT OF STATE ENTERPRISES TO LABOR COLLECTIVES

Article 10.- Conditions for assignment of enterprises to labor collectives

The labor collective in an enterprise shall be assigned the enterprise under the following conditions:

1. The labor collective in the enterprise, represented by the Trade Union Executive Committee or the person elected by the congress of the entire workers and employees in the enterprise, voluntarily register for the enterprise assignment;

2. It commits to further invest in production and business development, ensure jobs for at least 3 years or more and fully pay insurance premium for the laborers in the enterprise (except for people who voluntarily terminate their labor contracts);

3. It inherit the enterprise�s debts (excluding bad debts) under the agreement between the enterprise assignor and assignee;

4. It commits not to lease, assign or dissolve the enterprise without permission within at least 3 years after the assignment;

5. When the conditions permit the sale, the State must be paid back 30% of the share value at the time of enterprise assignment.

Article 11.- The principles for dealing with assets, financial matters and debts upon the enterprise assignment

The Renewal Boards at enterprises shall conduct the inventory, determining the quantity and real status of the entire assets; the long-term and short-term investments; the assets rented, borrowed, kept or sold for others, entrusted for sale, appropriated, leased, lent; comparing and classifying types of debts; making list of creditors and debt amounts to be paid, list of debtors and debt amounts to be recovered, with clear determination of debts which can be recovered and debts which can not be recovered; classifying assets and dealing therewith:

1. Assets rented, borrowed, kept for others, entrusted for sale: The enterprises shall return them to their owners, liquidate the contracts therefor or continue the rent, borrowing, keeping in custody or entrustment according to the agreement between the enterprise and the owners of the rented, borrowed or kept assets.

2. Appropriated assets: The enterprise assignor shall decide it immediately after the assignment of enterprise.

3. Debts shall be dealt with according to the principles:

a) The bad debts shall be frozen, clearly determining the liability so as to settle them according to the current regulations;

b) Debts to be recovered or to be paid shall be inherited and handled by the assignee. Where the payable amounts are larger than the value of the enterprise�s assets, the budget debts shall be forgiven; the bank debts shall be handled with the support from the Funds for Support of Restructure and Equitization of State Enterprises;

c) Social insurance debts owed to the social insurance agencies before the assignment of enterprise shall be deducted from the value of the enterprise for payment thereof or from the Funds for Support of Restructure and Equitization of State Enterprises.

4. The remaining assets, after paying all necessary expenses for the enterprise assignment, shall be transferred to the ownership of the labor collective in the enterprise.

Article 12.- Order and procedures for enterprise assignment

1. The Trade Union Executive Committee shall, together with the enterprise director, organize a plenary meeting of the workers and employees to decide by the majority of vote on the voluntary acceptance of the enterprise; draw up and adopt the plan for the enterprise assignment; satisfy the conditions on enterprise assignment with the commitment to fully use the labor in the enterprise (except for those who voluntarily terminate their labor contracts); nominate representative to carry out the procedures for the enterprise assignment.

2. Classifying assets; determining and classifying debts; making the financial statements; handling asset, financial and debt matters according to the principles for dealing with assets, financial matters and debts mentioned in Article 11 of this Decree.

3. The enterprise�s trade union executive committee or the person elected as representative by the congress of workers and employees shall make the list and classification of laborers, then compile dossiers thereon; draw up production-business plans and commit to take the enterprise.

4. The representative of the labor collective shall send the dossiers of application for acceptance of the enterprise to the Board for Renewal of Enterprise Management. Such a dossier shall comprise:

a) The application for the acceptance of the enterprise;

b) The production-business plan;

c) The projected form of new enterprise;

d) Commitments of the labor collective in the enterprise.

5. The competent level shall ratify the dossiers of application for acceptance of enterprise and issue decision to assign the enterprise to the labor collective. This decision shall be addressed to such agencies as the enterprise finance section, the enterprise tax collection agency, the Planning and Investment body, the Statistics Department of the locality where the enterprise is headquartered; the Central Board for Renewal of Enterprise Management.

6. To organize the signing of the enterprise assignment contract between the representative of the labor collective and the person authorized by the minister or the president of the provincial People�s Committee, or the Corporation 91 general director. A contract on the State enterprise assignment shall contain the following major details:

a) The name and address of the enterprise to be assigned to the labor collective;

b) Full name and address of the representative of the labor collective;

c) The value of the to be- assigned enterprise, mode of assignment and acceptance;

d) Commitments by the labor collective at the enterprise;

e) The rights and obligations of the labor collective accepting the enterprise.

Enclosed with the contract shall be the list of value-converted assets to be handed over, the list of laborers in the collective to be assigned with the enterprise.

7. The Board for Renewal of Enterprise Management shall, together with the director of the enterprise, organize the hand-over of the enterprise according to the approved plan to the labor collective represented by the enterprise�s Trade Union chairman or the person elected by the congress of the workers and employees to accept and manage the enterprise to the witness of the representative of the authority having decided the enterprise assignment and the enterprise finance body.

8. The Board for Renewal of Enterprise Management shall publicly announce the enterprise assignment and the termination of the State enterprise�s operation on the mass media within 15 days after the issuance of the decision on the enterprise assignment.

9. The representative of the labor collective shall organize the business registration in the form of cooperative or a joint-stock company.

Article 13.- The ownership over the assigned enterprise

1. The entire assets of the assigned enterprise, which are calculated in value, shall belong to the ownership of the labor collective and be divided into shares for assignment to the laborers on the payroll who have paid the social insurance premium at the enterprise by the time of the enterprise assignment.

2. Each laborer in the enterprise shall be entitled to own part of the enterprise�s value in shares commensurate to the number of years he/she has worked for the State. For the number of shares assigned to him/her, a laborer is entitled to enjoy the dividends thereon, to bequeath them, but not to assign them within at least 3 years after the assignment of the enterprise; when assigning such shares, he/she shall have to return to the enterprise an amount equal to 30% of the share value at the time of the enterprise assignment.

Article 14.- The rights and obligations of the enterprise assignee

1. The enterprise assigned to the labor collective shall register its business in the form of either cooperative or joint-stock company.

The business registration dossier shall include:

a) The competent level�s decision on the assignment of the enterprise;

b) The contract on the enterprise assignment and acceptance and the minutes on the hand-over of enterprise to the labor collective in the enterprise;

c) The enterprise�s organization and operation charter;

d) The minutes on the election of the enterprise�s leadership;

e) The business registration paper of the enterprise before it is assigned (if any).

2. To take initiative in using the entire assigned assets, organizing production and business and distributing incomes according to the enterprise�s organization and operation charter.

3. To inherit the interests of the State enterprise according to the agreement in the enterprise assignment contract; inherit the former enterprise�s contracts on land lease, power and water supply according to the provisions of law. The assigned enterprise�s land use right shall comply with the land legislation.

4. To be given conditions for organizing the re-training financed by the Funds for Support of Restructure and Equitization of State Enterprises so as to create jobs for the laborers.

5. The enterprise shall have to employ all the existing labor, ensuring jobs for at least 3 years for the laborers, except for those who voluntarily terminate their labor contracts. After that period, if due to the reorganization of the enterprise�s business activities or to the technological renewal, the laborers lose their jobs, such laborers shall be entitled to the policies currently prescribed by the Government.

6. To fulfill the commitments in the enterprise assignment and acceptance contract as well as the obligations towards the State as prescribed by law.

Chapter III

SALE OF STATE ENTERPRISES

Article 15.- Announcing the decisions approving the sale and the registration for the purchase of enterprises

Basing him-/herself on the competent level�s decision approving the sale of an enterprise, the director of the enterprise shall announce this to the entire laborers in the enterprise and on the mass media; organize the registration of the enterprise purchasers within 30 days.

Article 16.- Organizing the sale of enterprise by mode of bidding

1. Where there are two or more registrants for the purchase of the enterprise, the sale of enterprise must be conducted by mode of bidding.

2. The person deciding the sale of enterprise shall set up the Bidding Council. The Bidding Council shall notify the purchase registrants of the submission of the application for participation in the bidding, the minimum price level, the deposit level, the time-limit for dossier submission, and publicly announce on the mass media and post up at the enterprise�s office the bidding for sale of the enterprise.

3. The purchasers shall submit applications for the bidding for the purchase of the enterprise according to the form set by the Bidding Council and pay the deposit;

The Bidding Council shall receive the applications and deposit money, make the list of bidders and issue certificates to them.

4. The bidders may go to the enterprise to study the accounting books, the assets inventory and survey the real situation of the enterprise.

5. Thirty days after the notice on application submission, the purchase registrants shall have to send their bids to the Bidding Council.

Such a bid shall include:

a) The application for the purchase of the enterprise (according to set form);

b) The plan on the employment of the laborers working at the enterprise;

c) The projected type of new enterprise;

d) The price offer for the purchase of the enterprise.

The bids shall be put into sealed envelops.

6. Five days after the dossier-receiving deadline, the Bidding Council shall send notice on the time and location of the bidding to each bidder. The Bidding Council shall publicly post up the list of bidders at the place of bidding for 2 days before the bids are opened.

7. The bids opening shall be conducted for not more than 01 day as follows:

a) The Bidding Council shall check the seals, publicly open the envelop of each bidder and announce the labor-using plan and the price offer of each bidder for recording them in the minutes; announce the plan on the employment of laborers with the largest number and the highest price offer of each bidder;

b) The chairman of the Bidding Council and bidders shall sign the minutes of the bids opening.

8. Bid evaluation:

a) The Bidding Council shall discuss the labor-using plans and price offers in order to select by voting the bid winner;

b) The Bidding Council shall make a report on the bid evaluation and send it to the Board for Renewal of Enterprise Management and the person who has decided the sale of enterprise.

Article 17.- Organizing the enterprise sale by direct mode

1. The enterprise sale by the direct mode shall apply when there is only one purchase registrant.

2. The purchase registrant shall submit his/her dossiers to the enterprise director or the Board for Renewal of Enterprise Management; the dossier contents shall comply with the provisions on the cases of enterprise sale by mode of bidding.

3. The enterprise purchase registrant may go to the enterprise to study the accounting books, the assets inventory and survey the real situation of the enterprise.

4. The enterprise director shall report to the Board for Renewal of Enterprise Management so as to discuss directly with the purchaser�s representative about the labor-using plan, the price offer and reach agreements on details in the sale/purchase contract.

The Board for Renewal of Enterprise Management shall send the dossier and the minutes to the person who has decided the enterprise sale.

Article 18.- Responsibilities of the to be-sold enterprise

1. To inventory and determine the quantity of assets available at the enterprise, including fixed assets and long-term investment, moveable assets and short-term investment, rented assets, leased assets, assets kept in custody for other, assets entrusted for sale; to evaluate the real status of such assets and to collect the recoverable debts.

2. To classify the assets available at the enterprise into the following types:

a) Assets that may be further used;

b) Assets that cannot be used any more;

c) Assets created from the reward fund, the welfare fund.

3. To collate and classify debts; make the list of creditors and the payable debt amounts and the list of debtors and the debt amounts to be recovered, with the separation of debts that can be recovered from the debts that cannot be recovered;

4. Make the financial statement up to the time of the enterprise sale;

5. To make the list and classification of the laborers working in the enterprise by the time of deciding the sale of enterprise:

a) The number of laborers entitled to the social insurance policy;

b) The number of laborers who are enjoying the social insurance policy on illness, maternity, labor accidents and occupational diseases;

c) The number of laborers subject to the temporary postponement of the labor contract performance;

d) The number of laborers terminating labor contracts.

e) The number of laborers being still under the labor contracts.

6. To hand over the assets, books and relevant dossiers to the enterprise purchaser under the agreement inscribed in the sale/purchase contract.

Article 19.- The principle for dealing with the assets and finance of the enterprise before its sale

1. Assets not calculated into the enterprise�s value shall be dealt with as follows:

a) Assets which can not be used any longer shall be settled by the level that has decided the sale of enterprise by way of: transfer, cession, liquidation or putting into the purchaser�s custody for not more than 90 days;

b) Assets which are rented, borrowed or kept for others: The enterprise shall have to return them to their owners and liquidate the contracts, or they shall be further rented or kept in custody upon the agreement reached between the enterprise purchaser and the assets owners; the appropriated assets shall be decided by the level that has decided the sale of enterprise;

c) Assets created from the reward fund, the welfare fund: They shall be separately inventoried for transfer to the labor collective;

d) Expenses for the unfinished construction of projects which had been suspended before the time of determining the enterprise�s value shall be settled jointly by the purchaser and the seller in conformity with the interests of each party;

e) Bad debts to be recovered: The level that has decided the sale of enterprise shall freeze the debts, determine the liability therefor and settle them according to the current regimes.

2. The reserves for: the reduction of prices of goods in stock, bad debts, the securities price fall, the exchange rate difference and the undivided profit amounts must be dealt with before determining the sale price of the enterprise.

3. The credit balances in cash of the reward fund and the welfare fund shall be divided for the laborers working at the enterprise before it is sold.

Article 20.- The principles for dealing with the enterprise�s debts

1. The debts to be recovered and to be paid shall be settled by the enterprise. Where the purchaser commits to inherit the recoverable and payable debts, such must be inscribed in the enterprise sale/purchase contract and notify it to the concerned parties.

2. Where the proceeds from the sale of the enterprise is not enough for the payment of the enterprise�s debts, it shall be settled as follows:

a) Writing off all tax debts and State budget debts;

b) The debts owed to the social insurance, banks, enterprises and individuals shall be dealt with according to the specific guidance of the Ministry of Finance.

Article 21.- Dealing with the labor and managerial apparatus of the sold enterprise

1. The enterprise purchaser shall have to take in the laborers according to the labor-using plan committed when buying the enterprise. For the laborers who have voluntarily terminated their labor contracts, the current regimes shall apply.

2. Entitlements regime for laborers shall be as follows:

a) For the laborers eligible for the social insurance regime, the enterprise director and the social insurance agency where the enterprise pays its social insurance premium shall settle the benefits for the laborers according to the current regimes;

b) For cases of labor contract termination, the laborers shall be paid the severance allowances according to the provisions of Article 42 of the Labor Code and the Government�s Decree No. 198/CP of December 31, 1994 regarding the time the laborers had previously worked in the State sector but not yet received the severance allowances;

c) For the laborers who continue working at the new enterprise, the enterprise director shall have to proceed with the procedures so that the social insurance agency may issue the insurance books as prescribed and transfer the list and files of the laborers being still under the enterprise�s management to the new enterprise.

3. The enterprise director shall have to pay all social insurance debts (including the amounts to be paid by the laborers) to the social insurance agency where the enterprise pays the social insurance premium as prescribed by law.

Where the proceeds from the sale of the enterprise is not enough for payment of the social insurance debts and the severance allowances to laborers, the deficit amount shall be deducted from the Funds for Support of Restructure and Equitization of State Enterprises for the payment thereof.

4. The director, deputy-directors and chief accountant of the enterprise shall be considered by the level that has decided the sale of enterprise on the case-by-case basis for new postings or for settlement according to the job severance regime.

Managers who have lacked responsibility, thus leading to business losses and the loss of State capital must not hold managerial positions at other State enterprises or State bodies.

5. After the issuance of the decision on the enterprise sale, if a laborer quits or loses his/her job:

a) The new enterprise shall pay the job severance or loss allowances for the period he/she has worked at the new enterprise;

b) For the duration the laborer had previously worked for the State sector but not yet received the allowances for job severance or loss, he/she shall be entitled to enjoy such allowance according to the provisions of law. The source for payment of job severance or loss allowances shall be deducted from the Funds in Support of Restructure and Equitization of State Enterprises or from the State budget.

Article 22.- Principles for determining the sale price of enterprise

1. The sale price of enterprise shall be determined on the basis of:

a) The actual value of the enterprise, accepted by both the purchaser and the seller;

b) The level of price discount for the purchaser when the purchaser commits to make investment so as to maintain the production and business, to provide jobs for the laborers and other conditions agreed upon by the seller.

2. Bases for determining the sale price of the enterprise:

a) For cases of the enterprise purchase with its rights and obligations being inherited:

- The data in the accounting books of the enterprise at the time of sale;

- The actual value of the State capital portion in the enterprise at the time of sale after subtracting the payable debts, which is accepted by the purchaser and the seller.

b) In cases where the enterprise purchaser does not inherit its rights and obligations, the enterprise sale price shall be the actual sale price of all its existing assets, determined on the basis of their current quality state, technical properties, the use requirements of the purchaser and the market price at the time of sale.

3. When determining the actual value of the enterprise, the hiring of audit is not required. For enterprises which have failed to comply with the Ordinance on Accountancy and Statistics, the agency which decide the enterprise sale price shall consider the hiring of the independent auditing organizations to determine the value thereof. The money paid for such audit hiring shall be accounted into the enterprise sale cost.

Article 23.- Approving the sale plans, sale prices, signing the contracts and issuing decisions on sale of State enterprises

Basing themselves on the proposals of the Boards for Renewal of Enterprise Management, the ministers, presidents of the provincial/municipal People�s Committees, Managing Boards of Corporations 91 shall have to do the following:

1. Approving the enterprise sale plans and issuing decisions on the sale of enterprises. Such a decision shall include the following contents:

a) Name and address of the to be-sold enterprise;

b) Name and address of the purchaser;

c) The sale price, mode of selling; the payment mode and time-limit;

d) The time-limit for conclusion of the contract and the sale and hand-over of the enterprise;

e) The responsibilities of the enterprise, the Board for Renewal of Enterprise Management and concerned bodies in dealing with other existing and arising problems.

2. Organizing the signing of contract with the enterprise purchaser. The contract on the purchase of enterprise shall include the following major contents:

a) Name and address of the to be-sold enterprise, its account number;

b) Name and address of the enterprise purchaser, his/her/its account number (if any);

c) The enterprise sale price;

d) Commitments made by the purchaser and the seller of the enterprise;

e) Mode of assets transfer, mode of payment for the purchase of enterprise, the time-limit for hand-over of the enterprise;

f) Dealing with arising problems and contractual disputes.

Enclosed with the contract shall be the assets inventory and the evaluation of the assets status agreed upon by the purchaser and the seller.

Article 24.- Announcing the sale decisions and the termination of operations of State enterprises

Within 15 days after the issuance of the decision on the sale of enterprise, the Board for Renewal of Enterprise Management shall perform the following tasks:

1. Announcing the termination of the State enterprise�s operations on the mass media according to the provisions of law.

2. Sending the enterprise sale decision to:

a) The Central Board for Renewal of Enterprise Management;

b) The enterprise�s finance body;

c) The tax authority;

d) The business registry;

e) The Statistics Department of the locality where the enterprise is headquartered.

3. Paying deposits to bidders (if any).

Article 25.- Hand-over of enterprise

Within the time-limit agreed upon in the contract, the Board for Renewal of Enterprise Management shall organize the hand-over of enterprise to the purchaser.

If the quantity and real status of the enterprise�s handed-over assets are not in line with the assets quantity and real status inscribed in the purchase/sale contract, the purchaser may request the readjustment of the signed contract.

Article 26.- Payment of money for the purchase of enterprise

The enterprise purchaser shall pay within the time limit prescribed in the purchase/sale contract, which, however, must not exceed 3 years after the issuance of the decision on the sale of enterprise.

Article 27.- After-sale business registration for the enterprise

The enterprise purchaser shall have to make the business registration at the business registry of the locality where the enterprise is headquartered (if the purchaser has not yet got the business license) in one of the forms prescribed by the Law on Enterprises or make the additional registration (if the enterprise purchaser has got the business license).

Article 28.- Rights and obligations of the enterprise purchasers

1. They may take initiative in using the purchased assets, selecting the business lines, reorganizing the production, making new investment, replacing the managerial apparatus, deciding the type of enterprise and continuing the land rent according to the provisions of law.

2. In case of continuing to maintain investment in development of the enterprise�s production and business, the purchaser may inherit the enterprise�s interests according to agreement in the enterprise purchase and sale contract as well as the signed economic contracts.

3. They are obliged to make the payment for the enterprise purchase according to the time-limits and conditions inscribed in the enterprise purchase and sale contract; to comply with all conditions and commitments made to the enterprise seller; inherit the enterprise�s obligations according to the contract and the provisions of law.

Article 29.- Inspection and supervision of the fulfillment of contractual commitments

The person deciding the sale of enterprise shall have to organize the supervision and inspection of the fulfillment of commitments in the enterprise purchase and sale contract; deal with or propose the competent State bodies to deal with the violations of contractual commitments by the purchaser according to the provisions of law.

Chapter IV

BUSINESS CONTRACTING AND LEASING STATE ENTERPRISES

Section I. BUSINESS CONTRACTING

Article 30.- Business contracting contents, norms and conditions

Based on the characteristics of each branch and the business results of the enterprise, the person deciding the business contracting shall prescribe the contents, norms and conditions therefor but have to take into consideration the following requirements:

1. Preserving the State capital;

2. Creating jobs and paying insurance premium for the laborers;

3. Increasing profits or reducing loss for the enterprise;

4. Implementing State policies and the signed contracts.

Article 31.- Discussing and agreeing on business contracting contents, norms and conditions

The business contracting contents and conditions as well as the specific rights and responsibilities of the parties to the contract and the contents of the contract must be discussed and agreed upon between the business contracting party and the contractor.

Article 32.- Business contract

The contract for business contracting shall include the following major contents:

1. Names and addresses of the State enterprise of the business contracting party and contractor;

2. The business contracting contents, mode, norms, conditions and term;

3. The rights and responsibilities of the parties in the course of implementing the contract; the contracting term shall be agreed upon by the two parties to the contract but shall not be less than 5 years;

4. The handling of violations, commendations and rewards, penalties in the process of contract performance;

5. Other contents relating to the business contracting.

Article 33.- The rights and responsibilities of the business contractor

1. To manage and use the capital and assets and receive the labor of the enterprise in accordance with the provisions of the business contract but not in contravention of the provisions of law; to inherit the rights and obligations of the enterprise.

2. To decide the organization of business, mode of payment of wages and bonuses in the enterprise.

3. To enjoy and decide the distribution of the income earned through the overfulfillment of contracting norms. The amount of profits in excess of the contracting norms, after being subtracted for payment of the enterprise income tax and for the establishment of the reserve fund, shall be used by the business contractor at his/her own will.

4. To be subject to income reduction if failing to meet the norms and requirements inscribed in the contract.

Article 34.- The rights and responsibilities of the business contracting decider

1. To inspect and supervise the fulfillment of commitments in the business contract, and handle violations of the commitments inscribed therein.

2. Not to intervene in the management activities of the business contractor; create favorable conditions for the business contractor to fulfill the commitments stated in the business contract.

Section II. LEASING OF STATE ENTERPRISES

Article 35.- Forms of enterprise lease

The lessee may select among the following forms of enterprise lease:

1. Leasing the enterprise�s assets: The lessee rents the entire assets which have constituted the production/business establishment of the enterprise together with the hiring of its labor, but shall not inherit the rights and obligations of the leased enterprise;

2. Leasing the operating enterprise: The lessee rents the assets which have constituted the production/business establishment of the enterprise together with the hiring of the enterprise�s labor and at the same time inherit the amounts of borrowings and debts, economic contracts, as well as other rights and obligations of the enterprise as agreed upon by involved parties.

Article 36.- Organizing the enterprise lease by mode of bidding

1. Where there are two or more persons registering their lease, the bidding must be organized.

2. The person deciding the lease of enterprise shall set up the Bidding Council. The Bidding Council shall announce to the lease registrants the time-limit for submitting their bids, the minimum price, the deposit level; announce the lease of enterprise on the mass media and post it up at the enterprise�s head-office.

3. The lease registrants shall submit their bids for enterprise lease and the deposit money to the Bidding Council;

The Bidding Council shall receive the dossiers and the deposit money, make the list of bidders and issue to them the written certification for bid participation.

4. Bidders may go to the enterprise to study the accounting books, the asset inventory and survey the real situation of the enterprise.

5. Thirty days after the announcement on the bidding, the enterprise lease registrants shall have to send their bids to the Bidding Council.

Such a dossier shall include:

a) The application for the lease, clearly stating the full name, address, the identity card number, the account number (if any) and the business registration certificate of the lessee;

b) The leasing form and term;

c) The plan on employment of the laborers working at the enterprise;

d) The price offer for the lease of the enterprise;

e) The report on the financial capability of the lessee.

Bids shall be put in sealed envelops.

6. Within 5 days after the bid-receiving deadline, the Bidding Council shall send a notice on the bidding time and location to each bidder and publicly post up the list of bidders at the place of bidding for two days before the bids opening.

7. The bids opening shall be conducted for not more than 1 day and as follows:

a) The Bidding Council shall check the seals, publicly open bids of every bidder and announce the labor-using plan and the price offer of each bidder for recording them in the minutes; announce the largest labor-using plan and the highest price offer of each bidder;

b) The chairman of the Bidding Council and bidders shall sign in the minutes of the bids opening.

8. Bids consideration:

a) The Bidding Council shall discuss the labor-using plans together with the price offers so as to select the bid winner by voting.

b) The Bidding Council shall make the report on the bids consideration and send it to the Board for Renewal of Enterprise Management as well as the person having decided the lease of enterprise.

Article 37.- Organizing the enterprise lease by direct mode

1. The enterprise lease by direct mode shall apply when there is only one registrant for the lease.

2. The lease registrant may go to the enterprise to study the accounting books, the assets inventory and survey the real situation of the enterprise.

3. The lease registrant shall submit the dossiers of application for the lease to the Board for Renewal of Enterprise Management. The contents of such a dossier shall comply with the provisions on the enterprise by mode of bidding.

4. The Board for Renewal of Enterprise Management and the enterprise director shall be tasked to:

a) Draw up the plan for enterprise lease;

b) Determine the minimum leasing price which shall serve as basis for discussion and negotiation between the parties concerned;

c) To discuss directly with the lessee about the labor-using plan, the leasing price, the leasing term and conditions of the enterprise-leasing contract;

d) To reach agreement with the lessee on the leasing price and the enterprise-leasing contract;

e) To submit dossiers, minutes and draft contract to the lease decider.

Article 38.- Responsibilities of the leased enterprise

1. To conduct the assets inventory, classify the entire assets available in the enterprise: the rented assets, the leased assets, the borrowed assets, the assets kept for others, the appropriated assets; evaluate the real status of such assets

2 To make the list of creditors and the payable debt amounts, the list of debtors and the amounts of debts to be recovered with the separation of debts which can be recovered from the debts which cannot be recovered; the enterprise shall have to settle the recoverable and payable debts before deciding the lease of enterprise.

3. To make the financial statement up to the time of deciding the lease of enterprise.

4. To make the list of laborers of the enterprise and files related to the laborers.

5. To hand over the assets, labor, files and relevant books to the lessee according to the agreement inscribed in the enterprise-leasing contract.

6. To manage books, documents and records on assets and labor of the enterprise during the leasing term.

7. To fulfill obligations towards the State as well as policies and regimes towards the laborers according to the provisions of law and the enterprise-leasing contract.

8. To be entitled to request the lease decider to terminate the leasing contract ahead of time (if the lessee violates the contract).

Article 39.- Principles for dealing with the assets and finance of the enterprise when it is leased

The assets and finance of the to be- leased enterprise shall be handled as follows:

1. The assets currently available at the enterprise shall be inventoried to determine their quantity and real status, which include: the fixed assets and long-term investment; the mobile assets and short-term investment; the rented assets, borrowed assets, leased assets, assets kept or sold for others, entrusted for sale or appropriated;

The assets which are rented, borrowed, kept for others, processed on order, entrusted for sale or appropriated shall be classified and inventoried separately.

2. The assets being available at the enterprise shall be classified and dealt with as follows:

a) The leased assets shall be classified and valued in terms of their real status, quality, technical properties and shall have their actual value determined;

The actual value of leased assets is determined on the basis of the enterprise�s accounting books at the time of lease, the use demand of the lessee and the market price at the time of lease;

The assets� actual value at the time of lease shall serve as basis for determining the enterprise- leasing price;

b) Assets not on the list of leased assets must be handled before the lease in the forms of: internal transfer, liquidation, cession or entrusted maintenance pending the handling;

c) The mobile assets shall be agreed upon by the lessor and the lessee;

d) Assets formulated from the reward fund and/or the welfare fund shall be transferred to the labor collective under the management of the enterprise�s Trade Union or shall be agreed upon by the lessor and the lessee.

3. The enterprise shall collate and determine debts of various types, making the list of creditors and the payable debt amounts and the list of debtors and the recoverable debt amounts with classification of the debts that can be recovered and the bad debts that cannot be recovered.

If the lessee does not inherit the recoverable and payable debts, the remaining managerial staff of the enterprise shall be assigned by the enterprise lease decider to monitor the lease contract and have to continue to recover the recoverable debts and pay the payable debts amounts.

4. In case of leasing the operating enterprise: The lessor and the lessee shall discuss with concerned parties to reach agreement on the inheritance of the rights and obligations of the legal person of the leased enterprise.

Article 40.- Settlement of labor upon the lease of enterprise

1. The to be-leased enterprise shall have to make the list of laborers available at the time of deciding the lease, classify them and make files on the laborers:

a) The number of laborers eligible for the social insurance policy;

b) The number of laborers enjoying the social insurance regimes on illness, maternity, labor accidents and occupational diseases;

c) The number of laborers subject to temporary postponement of the labor contract performance;

d) The number of laborers having terminated their labor contracts;

e) The number of laborers with the labor contracts being still valid, who shall be transferred to work at the leased enterprise;

2. If the enterprise lease is accompanied with the labor hiring, the enterprise lessee shall have to take in and arrange work for the laborers and ensure their interests in accordance with the lease contract and not in contravention of the provisions of the labor legislation.

The enterprise director shall have to carry out procedures so that the social insurance agency shall grant insurance books as prescribed, and shall transfer the list and records of the laboreres being under the enterprise�s management to the new enterprise.

3. For laborers eligible for the social insurance regimes, the enterprise director and the social insurance agency where the enterprise pays the insurance premium settle the interests for the laborers according to the social insurance statute.

4. For cases of job severance:

a) The enterprise director shall proceed with the procedures so that the social insurance agency where the enterprise pays the insurance premium shall settle the social insurance interests and grant the social insurance books according to the social insurance statute;

b) The enterprise director shall settle the job severance allowances according to the provisions in Article 42 of the Labor Code and the current regulations of the Government.

5. Where the enterprise lessee refuses to take all the existing laborers, the lease decider and the to be- leased enterprise shall have to arrange work for the remaining number of laborers or apply policies toward such laborers.

Article 41.- The principles for determining the enterprise-leasing price

1. The enterprise-leasing price shall be determined on the basis of: the leasing form, the minimum leasing price set by the lease decider, the actual value of the enterprise, the direct agreement on leasing price between the lessor and the lessee (in case of direct leasing) or the bid winning price (in case of bidding) which, however, must not be lower than the minimum leasing price set by the lease decider.

2. The minimum leasing price shall be determined on the following principles:

a) Ensuring to offset the expenses for tear and wear of the leased fixed assets;

b) Covering the reasonable expenses of the lessor in the course of organization, management and supervision of the leased assets;

c) Accounting profits in the enterprise-leasing price, depending on the assets status and business efficiency of the enterprise before it is leased:

- For enterprises conducting business with profits: The enterprise-leasing price shall not be lower than the minimum profit level set by the lessor.

- For enterprises suffering from losses or having not yet earned profits: When being leased, profits shall be accounted into the minimum leasing price.

Article 42.- Decisions to lease State enterprises

Based on the proposals of the Boards for Renewal of Enterprise Management, the competent levels shall issue decisions to lease State enterprises.

Such a decision shall include the following major contents:

a) Names, addresses and the account numbers of the leased State enterprise and the lessee;

b) The leasing contents, form and term;

c) The leasing price and mode of payment;

d) The tasks of the Board for Renewal of Enterprise Management and the enterprise-leasing organization�s person authorized to sign the lease contract;

e) Responsibilities of the leased enterprise and concerned bodies in dealing with the labor as well as other existing and arising problems.

Article 43.- Enterprise-leasing contracts

An enterprise-leasing contract signed by the lessee and the person authorized by the lease decider shall include the following major contents:

1. Names, addresses and account numbers of the leased enterprise and the lessee;

2. The enterprise-leasing price and mode of rent payment;

3. The leasing term shall be agreed upon by the contractual parties but shall not be less than 3 years;

4. The rights and responsibilities of the enterprise lessor and lessee;

5. The handling of the labor, assets, finance as well as rights and obligations of the enterprise, which are inherited in cases where the operating enterprise is leased;

6. Return of or dealing with the enterprise upon the expiry of the contract;

7. Commitments of the contractual parties;

8. The principles for handling arising matters and contractual disputes.

Enclosed with the lease contract shall be the inventory of assets under the enterprise�s management, determining the remaining value of such assets, and the list of laborers (if leasing the operating enterprise).

Article 44.- Announcing decisions on lease of State enterprises

Within 15 days after the signing of a decision on the lease of an enterprise, the Board for Renewal of Enterprise Management shall do the following:

1. Announcing the lease of enterprise on the mass media.

2. Sending the decision on the lease of the enterprise to the following agencies:

a) The Central Board for Renewal of Enterprise Management;

b) The enterprise�s finance body;

c) The tax office;

d) The business registry;

e) The Statistics Department of the locality where the enterprise is headquartered.

3. Payment of deposit money to bidders (if any).

Article 45.- Hand-over of enterprise

The lessor shall have to hand over the assets, books and vouchers, labor and relevant dossiers to the lessee within the time-limit agreed upon in the enterprise leasing contract.

The Board for Renewal of Enterprise Management shall, together with the person signing the leasing contract and the enterprise director, hand over the enterprise to the lessee.

Upon the hand-over, if the quantity and value of the enterprise�s assets are not compatible with the asset quantity and value inscribed in the contract, the lessee may postpone the hand-over and request the adjustment of the signed contract.

Article 46.- Rights and obligations of the enterprise lessee

Apart from the rights and obligations of the asset lessee prescribed in Section 5, Chapter II, Part III of the Civil Code, the enterprise lessee still have the following rights and obligations:

1. The rights of the enterprise lessee:

a) To take initiative in managing and using the hired assets and labor of the enterprise in service of business activities not contrary to the agreements in the contract and the provisions of law;

b) To be entitled to change or reorganize the production, make new investment as well as technological and technical renewal, to renovate, maintain, replace or repair assets damaged in the course of production and business operation. If the assets are subleased, the consent of the person who decides the enterprise lease is required;

c) To decide on its own the organization of the management and business apparatus, mode of payment of wages and bonuses in the enterprise;

d) To be entitled to enjoy profits brought about by the rent of enterprise after fulfilling the obligations towards the State and the lessor;

e) To inherit all the leased enterprise�s contracts on land and/or water surface rent, as well as on water and power supply (if having the demand therefor).

2. Obligations of the enterprise lessee:

a) To pay rent as agreed upon in the contract;

b) To use the assets for the right purposes agreed upon in the leasing contract; not to use the leased assets (except for those newly invested with own capital) for pledge or mortgage; not to sublease the land use right;

c) To preserve the value of the leased enterprise�s assets upon the liquidation of contract;

d) To settle together with the lessor arising matters related to the rights and obligations under the contracts for land lease, power, water or raw material supply, the sale of products, labor contracts; to improve the working conditions for the laborers and the environmental hygiene;

e) Be subject to the lessor�s inspection and supervision of the use of leased assets;

f) To fulfill other obligations prescribed in the enterprise-leasing contract.

3. In addition to the common rights and obligations prescribed in Clauses 1 and 2 of this Article, the lessee shall also have the following rights and obligations:

a) Where the enterprise is leased by another State enterprise, besides the contractual rights and obligations as stipulated in Clauses 1 and 2 of this Article and other provisions of law, the lessee State enterprise, after paying taxes of various kinds, shall have full power to use the profits earned from the operation of the enterprise it has rented;

b) Where the State enterprise lessee makes business registration under the Law on Enterprises or the Law on Cooperatives, he/she/it may use the rented assets and hired labor in service of the business objectives according to the mechanism prescribed for the type of enterprise he/she/it has registered, and at the same time shall have to comply with the provisions of the leasing contract as well as provisions at Clauses 1 and 2 of this Article;

c) Where the labor collective or individual laborer(s) in an enterprise rents the enterprise, it/he/she must have its/his/her own source of capital, register the establishment of an enterprise of the labor collective or individual(s), and shall have the right to use the leased State enterprise according to the mechanism prescribed for the registered type of enterprise.

4. If the enterprise lessee violates the contractual commitments, causing damage to the leased enterprise, apart from the liabilities agreed upon in the contract, the lease decider may terminate the contract and compel the lessee to compensate for the damage he/she/it has caused.

Article 47.- Rights and responsibilities of the persons who decide the lease of enterprises and the persons who sign the enterprise-leasing contracts

1. The person deciding the enterprise lease may direct the performance of the enterprise-leasing contract; settle proposals of the Board for Renewal of Enterprise Management and the contract signatories; decide the enterprise-leasing price; decide the recovery of the leased enterprise at the proposal of the signatory to the enterprise-leasing contract.

2. The persons who sign the enterprise-leasing contracts shall have the rights and responsibilities:

a) To organize the implementation of the contents and commitments in the enterprise-leasing contract;

b) To monitor, supervise and inspect the performance of the contract; not to intervene in the production and business activities of the enterprise; to create favorable conditions for the lessee to fulfill his/her/its commitments in the enterprise-leasing contract;

c) To handle according to competence arising problems; to propose the handling according to the provisions of law of the lessee who fails to fulfill his/her/its contractual commitments.

Article 48.- Termination of the enterprise-leasing contract

1. Upon the expiry of the enterprise-leasing term inscribed in the contract, the lessee shall hand over the enterprise�s value to the lessor; the two sides shall together evaluate the real status and value of the remaining assets, the newly or additionally invested assets, compare them with the contract, determine each side�s liabilities and reach agreement on dealing with the value of the newly invested assets, then proceed with the contract liquidation;

2. Where the lease contract is still valid or upon the expiry of the lease contract and the lessee has the demand to purchase the enterprise, the two sides shall liquidate the lease contract and proceed with the procedures for the purchase by the direct mode prescribed in this Decree.

Chapter V

PREFERENCES FOR ENTERPRISES, ASSIGNEES, PURCHASERS AND LESSEES OF ENTERPRISES AND THE LABORERS

Article 49.- Preferences for the assigned, sold or leased enterprises

1. Enterprises assigned to labor collectives and enterprises sold to collectives, individuals or legal persons shall be entitled to:

a) Enjoy preferences like newly set up enterprises and according to the provisions of the Domestic Investment Promotion Law (amended). In case of lack of conditions for enjoying preferences under the Domestic Investment Promotion Law, to enjoy a 50% reduction of the enterprise income tax for the first two years of operation;

b) Be exempt from fees for registration of business as well as of assets under the State enterprises� right to own and to use such assets which are now under the ownership of new enterprises;

c) Continue to maintain the contracts for rent of houses, workshops and/or land of old enterprises in accordance with the provisions of the Land Law as well as other current law provisions;

d) Continue to borrow capital of the commercial banks, financial companies and other credit institutions of the State at the interest rates applicable to the State enterprises;

e) Continue to export and/or import goods according to the current regimes prescribed for the State enterprises;

f) Before being assigned, sold or leased, the enterprises may take initiative in using the credit balances of the reward fund and the welfare fund (in cash) to distribute to the laborers working at the enterprises (without having to pay income tax);

g) Maintain and develop the welfare fund in forms of kind, cultural works, clubs, clinics, sanatorium in order to ensure welfare for the laborers who continue to work at the assigned or sold enterprises. These assets belong to the ownership of the labor collective and are managed by the Trade Union organizations at the enterprises.

2. The leased enterprises are entitled to enjoy the preferences prescribed at Points c, d, e, f and g of Clause 1, this Article.

Article 50.- Preferences for purchasers being the labor collectives in enterprises

Labor collectives which satisfy the conditions prescribed in Clause 13, Article 3 of this Decree, when purchasing enterprises, shall be represented by the Trade Union presidents or the persons elected by the congress of the entire workers and employees in the enterprises in carrying out procedures for the purchase of enterprises, and shall be entitled to enjoy the following preferences:

1. For the labor collectives which purchase the enterprises to maintain production and business, ensure jobs for themselves and commit to accept all the laborers available at the enterprises (except for those who voluntarily terminate their labor contracts) while the to be purchased enterprises have suffered from loss to the extent of losing their capability to pay all debts and the proceeds from the sale of enterprises are expected not to be enough for payment of debts:

a) If such labor collectives ensure that from 50% to 100% of the enterprises� existing laborers shall move to work at the new enterprises and commit to provide jobs for these laborers for 1 consecutive year or more, they shall be entitled to the 70% reduction of the sale prices;

b) If such labor collectives only ensure that less than 50% of the enterprises� existing laborers shall move to work at the new enterprises and commit to provide them with jobs for 1 consecutive year or more, they shall be entitled to the 50% reduction of the sale prices.

2. For labor collectives which purchase enterprises to maintain production and business, ensure jobs for themselves and commit to accept all the laborers available at the enterprises (except for those who voluntarily terminate their labor contracts), and the to be purchased enterprises are earning profits of not suffering from losses and the proceeds from the sale of enterprises may be enough for payment of debts:

a) If the labor collectives ensure that from 50% to 100% of the enterprises� existing laborers shall move to work at the new enterprises and commit to provide them with jobs for 1 consecutive year or more, they shall be entitled to the 50% reduction of the sale prices.

b) If the labor collectives only ensure that less than 50% of the existing laborers of the enterprises shall move to work at the new enterprises and commit to provide jobs for them for 1 consecutive year or more, they shall be entitled to the 40% reduction of the sale prices.

3. Purchasers being individuals or a group of laborers in an enterprise, which are not recognized as representatives of the labor collective in the enterprise, shall not be entitled to enjoy preferences like the labor collective which purchases the enterprise.

4. Each laborer in the enterprise-purchasing collective is entitled to own a part of the enterprise�s value, corresponding to his/her contributed capital amount, has the rights and obligations of the capital contributors but must not assign his/her shares to persons outside the enterprise within 1 year after the purchase of the enterprise.

Article 51.- Preferences for purchasers not being labor collectives

1. If employing all the laborers of the enterprises (except for those who voluntarily terminate their labor contracts) and providing jobs for them for 1 consecutive year or more, they shall be entitled to the 50% reduction of the sale prices.

2. If employing from 50% to under 100% of the enterprises� laborers to work at the new enterprises and providing jobs for them for 1 consecutive year or more, they shall be entitled to the 30% reduction of the sale prices.

3. If only employing from 20% to under 50% of the enterprises� laborers to work at the new enterprises and provide jobs for them for 1 consecutive year or more, they shall be entitled to the 20% reduction of the sale prices.

Article 52.- Preferences for purchasers who make the immediate payment

If the enterprise purchasers make the immediate payment in lump sum after the purchase, they shall be entitled to enjoy a maximum of 20% reduction of the sale prices; if the payment is made in many installments within a year after the purchase of the enterprises, they shall be entitled to the maximum of 10% reduction of the sale prices.

Article 53.- Policies towards laborers who are not employed by the enterprises

The laborers who are not employed by the purchasers or automatically terminate their contracts:

1. Before the sale of enterprises, they shall be distributed with the credit balances of the reward fund and the welfare fund (in cash) by the enterprises;

2. They are entitled to enjoy other regimes prescribed by the labor legislation.

Chapter VI

ORGANIZING THE ASSIGNMENT, SALE, BUSINESS CONTRACTING AND LEASE OF STATE ENTERPRISES

Article 54.- Competence to select and decide the application of assignment, sale, business contracting or lease of enterprises

Based on the overall plan for restructure of the State enterprises, already approved by the competent level:

1. Ministers of the branch-managing ministries and presidents of the provincial People�s Committees shall decide the assignment, sale, business contracting or lease of the enterprises under their respective management, including member enterprises of Corporations 90.

2. The Managing Boards of Corporations 91 shall decide the assignment, sale, business contracting or lease of their member enterprises.

Article 55.- Responsibilities for organizing the assignment, sale, business contracting and lease of State enterprises

1. The Enterprise Management Renewal Boards of the ministries, provinces, centrally-run cities and Corporations 91 shall be the bodies assisting the ministers, the provincial People�s Committee presidents, or chairmen of the Managing Boards of Corporations 91 to organize the assignment, sale, business contracting and lease of State enterprises.

Depending on the characteristics of the production and business lines, the form of assignment, sale, business contracting or lease of enterprises and on the financial situation of the enterprises, the Enterprise Management Renewal Boards may invite representatives of banks, enterprises, laborers in the enterprises and of other relevant agencies to join.

2. The ministries, provincial People�s Committees and Corporations 91 shall have to decide the establishment of the Renewal Boards at the enterprises to be assigned, sold, business contracted or leased, which shall make preparation, draft plans, inventory assets, capital and debts, make lists of laborers of the enterprises and proceed with other necessary procedures under the guidance of the superior Enterprise Management Renewal Boards.

Article 56.- Tasks of the Enterprise Management Renewal Boards of the ministries, provinces, centrally-run cities and Corporations 91 in organizing the assignment, sale, business contracting and lease of enterprises.

1. In case of enterprise assignment:

a) To draw up the enterprise assignment plan; announce to the entire laborers in the enterprise and on mass media the assignment of enterprise;

b) To appraise the enterprise�s value; determine the current state of assets as well as their quality, technical properties and the market prices;

c) To compare debts; make the list of creditors and debtors and the amounts of recoverable debts and payable debts; to draw up plans for dealing with existing problems regarding the enterprise�s finance and labor;

d) To make the contract for assignment of enterprise and report it to the minister, the provincial People�s Committee president or the Managing Board of the Corporation 91 for decision;

e) To guide, inspect and supervise the Renewal Board at the enterprise in recovery of the enterprise�s assets, return of assets which the enterprise has rented, borrowed or kept in custody for others; the recovery and payment of debts of the enterprise; hand over the assets, books and relevant dossiers to the enterprise assignee as agreed upon in the enterprise assignment contract;

f) To handle according to competence matters arising from the assignment of enterprise.

2. In case of enterprise sale:

a) To draw up the plan for sale of enterprise; announce to the entire laborers in the enterprise and on the mass media the sale of enterprise;

b) To appraise the enterprise�s value, determine the projected price for the sale of enterprise, based on the value on books, the current state of assets, their quality and technical properties at the market price;

c) To compare debts, make the lists of creditors and debtors as well as the amounts of recoverable debts and payable debts; draw up plans for dealing with existing problems regarding the enterprise�s finance and labor;

d) To organize the direct sale or sale through bidding of the State enterprise; analyze and evaluate bids, propose the sale price (in case of direct sale) or select the bid winner (in case of bidding) for the enterprise seller to decide;

e) To make the contract for the sale of enterprise and report it to the minister, the provincial People�s Committee president or the Managing Board of the Corporation 91 for decision;

f) To guide, inspect and supervise the Renewal Board at the enterprise in recovery of the enterprise�s assets, return of the assets the enterprise has rented, borrowed, kept in custody for others; recovery and payment of the enterprise�s debts; hand over the assets, books and relevant dossiers to the enterprise purchaser as agreed upon in the enterprise-selling contract;

g) To handle according to competence matters arising from the sale of enterprise.

3. In case of enterprise leasing:

a) To draw up the plan for enterprise leasing; determine criteria and conditions for lease of enterprise; announce at the enterprise and on mass media the lease of enterprise;

b) To guide the Renewal Board at the enterprise in the inventory of the entire assets owned by the enterprise, determine the financial real situation and assets of the enterprise, which shall be converted into value before the lease;

c) To determine the minimum leasing price and propose the enterprise leasing price;

d) To analyze and evaluate the lease plan; discuss and negotiate directly with the lessee on the leasing contract or organize bidding for the enterprise lease. To propose the direct lessee (in case of direct lease) or the bid winner (in case of bidding) to the person who has decided the leasing of enterprise for decision;

e) To make the contract for enterprise leasing and report it to the minister, the provincial People�s Committee president or the Managing Board of the Corporation 91 for decision;

f) To handle according to competence matters arising from the lease of enterprise.

4. In case of business contracting of enterprise:

a) To determine the criteria and conditions for business contracting; to organize the elaboration of plan for business contracting of the enterprise;

b) To directly discuss with the business contractor or organize a bidding to select the business contract performer;

c) To make the business contract and report it to the minister, the provincial People�s Committee president or the Managing Board of the Corporation 91 for decision.

Article 57.- Responsibilities of the Enterprise Management Renewal Boards of the ministries, provinces, centrally-run cities and Corporations 91

The Enterprise Management Renewal Boards of the ministries, provinces, centrally-run cities and Corporations 91 shall take responsibilities for the con-tents and results of their assigned work before the persons who have decided the assignment, sale, business contracting and lease of enterprises and before law.

Article 58.- Competence to approve plans for assignment, sale, business contracting or lease of enterprises

1. At the proposals of the Enterprise Management Renewal Boards, the ministers, the provincial People�s Committee presidents and the Managing Boards of Corporations 91 shall decide the criteria and conditions for business contracting, the leasing prices, the selling prices and approve the plans for assignment, sale, business contracting or lease of enterprises which possess on their accounting books the State capital of under 1 billion VNdong.

2. Enterprise which possess on their accounting books the State capital of from 1 to under 5 billion VNdong shall be considered on the case be case basis by the Prime Minister upon the submission by the ministers, the provincial People�s Committee presidents or the Managing Boards of the Corporations 91.

Article 59.- Competence to sign contracts for the assignment, sale, business contracting or lease of enterprises

1. The contracts for assignment, sale, business contracting or lease of the State enterprises under the management of the ministries shall be signed by the ministers or the persons authorized by the ministers.

2. The contract for assignment, sale, business contracting or lease of the State enterprises under the local management shall be signed by the provincial People�s Committee presidents of the persons authorized thereby.

3. The general directors of the Corporations 91 shall sign contracts for assignment, sale, business contracting or lease of their member enterprises.

Article 60.- Responsibilities for organizing and monitoring the performance of the contracts for assignment, sale, business contracting or lease of enterprises

Persons who sign the contracts for assignment, sale, business contracting or lease of enterprises shall have the responsibilities to:

1. Organize the performance of contracts for assignment, sale, business contracting or lease of enterprises;

2. Monitor, supervise and inspect the performance of contracts and handle arising matters.

3. All problems arising in the course of performing contracts for assignment, sale, business contracting or lease of enterprises shall be jointly settled by the contracting parties; if disputes still exist, they may request the provincial Economic Court to decide.

Article 61.- Announcing and registering for the assignment, purchase, business contracting or renting of enterprises

The Enterprise Management Renewal Boards of the ministries, provinces, centrally-run cities and Corporations 91 shall announce before the entire enterprises and on the mass media the application of the form of assignment, sale, business contracting or lease of enterprises and make the lists of registrants for the assignment, purchase, business contracting or renting of enterprises within 30 days after the competent levels approve the plans on the transformation of enterprises.

Past such time limit, if no one registers for any of such forms, the Enterprise Management Renewal Boards shall request the competent level to proceed with the procedures for the dissolution of enterprises. Where an enterprise has fallen into the state of bankruptcy, the enterprise director shall have to file an application requesting the provincial Economic Court to carry out procedures for the bankruptcy of the enterprise.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 62.- Effect and responsibilities for guiding the implementation of the Decree

This Decree takes effect 15 days after its signing. All previous documents contrary to this Decree shall now be invalidated.

Within 30 days after this Decree takes effect, the ministries of Finance; Labor, War Invalids and Social Affairs; Planning and Investment; the State Bank of Vietnam, the Government Pricing Committee, the General Land Administration and concerned ministries shall have to guide the implementation of this Decree.

Article 63.- Responsibilities for organizing the implementation

The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People�s Committees of the provinces and centrally-run cities, and the Managing Boards of Corporations 91 shall have to implement this Decree, periodically once every three months report to the Prime Minister on the implementation thereof and make proposals for well implementing this Decree.

On behalf of the Government

Prime Minister

PHAN VAN KHAI